UBS has been closing the secret accounts of its American clients, forcing them into the cold, tax lawyers say. Many Americans with undeclared accounts have sought leniency by making voluntary disclosures to the IRS. Meanwhile, UBS has reported large outflows of deposits, which go beyond its American clientele.
Union Bank of Switzerland is haemorrhaging clients, not just American ones who have unwisely not stuffed their US passports in a shredder, but others too who no longer trust the bank with their privacy.
Frankly UBS was insane to do business in the USA in the first place, given the mafia-like behaviour of the American tax authorities, and the way I see it, this is just a very bad business decision being punished by clients voting with their feet money in favour of more discrete and less bombastic banks that cater to people with the quaint notion that their own money belongs to them and not the IRS… or any other rapacious state.
And any US nationals throwing themselves on the mercy of the thuggish IRS seriously need their heads examined. At the first sign of trouble, and this has been brewing a long time, they should have sold up and got the hell out of the USA for good. The weather in Costa Rica is really very nice, guys, trust me, and your money buys a whole lot more down here.
Horror! an USB appliance hater! in Samizdata!! i am sure there is some legislation against that :))))
Well, we are like in 20-30’s, Gansterism and Crime will grow like never before in this decade.
Well, it was VHS versus Betamax, really. Firewire/IEEE1394 has always been a much more elegant solution for most purposes, but Apple’s licensing was too restrictive for the better solution to win.
Hilarious :/
I don’t disagree that UBS should have thought long and hard before establishing such a large US presence (although, to be fair, the IRS’s “mafia-like behavior” was mostly directed against US nationals, not foreign banks, until very recently). They made their bed and they’re going to have to lie in it. But my real disappointment is with the Swiss government, for (apparently) caving in to US demands which are blatantly in violation of our tax treaties. Tax treaties can, of course, be repudiated, but the Swiss should have demanded that the US do so (incurring all the foreign approbation that would entail) rather than giving the IRS such an easy victory.
If pushed, the Federal courts would have had to abide by a formally ratified treaty (it is “the supreme law of the land”, according to the Constitution, not subordinate to IRS subpoenas and fishing expeditions). UBS was caught in the middle here, and had every right to expect better of its own government. I’m sure many lessons are being learned from this episode, and in the long run this will not redound to the credit (or even the best interests) of either government.
Oh dear! Check your facts guys: UBS does not stand for Union Bank of Switzerland; other banks in the UK have been doing the same thing to Americans holding accounts with them etc.,.
While I’m 100% behind the idea that the money we earn is ours not the state’s, if someone commits a crime (and in most countries tax evasion is a crime) they shouldn’t try and take the moral high ground. The real source of criticism here is the idea that a state should be entitled to grab its share of money anywhere in the world no matter whether that money was earned in the state or not, that the state should always seek more sources of revenue rather than trying to live within its citizen’s means and, crucially, the idea that countries which have lower tax rates are somehow bad guys when it is in fact those states with high tax rates who are the rotten ones.
UBS was the result of the merger of the Union Bank of Switzerland and the Swiss Bank Corporation in June 1998. Although the merged company’s new name was originally supposed to be the “United Bank of Switzerland,” officials opted to call it simply “UBS”. However people in the banking industry still actually tend to call it… Union Bank of Switzerland.
If I think extra territorial taxation is wrong, not to mention strong arming a foreign jurisdiction, then I fail to see what is immoral about doing whatever you can to avoid an immoral imposition of power. It is a crime in the USA… so what? Laws and morality are two quite separate things.
Precisely. Tax evasion is not a crime in Switzerland, and they have every right to make that determination. Our government accepted that when it entered into a tax treaty with Switzerland, a treaty which it is now ignoring.
My sympathies are with the depositors who are trying to protect their assets from a rapacious government. Just because some sleazy politician decrees that something is a “crime” doesn’t make it so. Frankly, I think we should all be more aggressive in thumbing our noses as such “non-crimes”, and we certainly owe our moral support to those with the courage to do so.
To be fair, UBS does a lot of “regular” business in the US, probably more than a thousandfold over the value of these proportedly unreported accounts. They are a lot less obnoxious and stupid than, for example, any of the TARP banks.
In theory, US citizens are liable for taxes for 10 years after relinquishing cizenship and the US can invade any country to enforce any law (like with Noriega). Many low-tax countries have a relativley high cost of living and limited employment oppertunities; Costa Rica doesn’t really distinguigh itself and the link to ugly women isn’t very persuasive.
The bigger question is what these individuals were hoping to accomplish. If they were looking to grow welath, why not set up an Anguillan trust and be done with it? If they just wanted to do business in Switzeland why not fill out the treasury form and comply with the law? Yes, UBS is to blame, but mostly just for accepting stupid clients.
“and your money buys a whole lot more down here.”
Dude, come on. Even I, hopeless. loser, geek that I am , can google up something more salacious and appropriate, (in context at least), than that:
(Link)
More for your money indeed.
My favorite subject on Samizdata! I’m in Cosa Rica and I married a local and I ritually threw my US passport in the Naranjo and then told the IRS to go fuck themselves.
As long as you don’t go back, they have zero chance of enforcing that and invasion of Costa Rica is about as likely as a meteor strike on Washington DC (well, a guy can dream, no?)
The USA has limited employment opportunities. It’s a safe bet the 52,000 US nationals mentioned as having UBS accounts and avoiding US taxes overseas will have high quality skills that given them significant advantages, particularly in this internet age. These people are hardly burger flippers.
As for complying with US law, it is crazy to ever let the US know about your offshore money unless you want them to tax you at some point.
And I guess you like your women airbrushed.
“The USA has limited employment opportunities.”
Oh, yeah? What’s the market for stage lighting designers in Costa Rica? Even with the feds stomping on me, I can still get bits of work in America.
I told J. Orlin Grabbe, “No thanks,” years ago. If I wanted to live in a third-world shithole, the IRS would have nothing to do with it. That’s exactly the same reason why I will never leave America: I’m an American.
Unload on UBS by all means but the wider picure is that Switzerland is, and has been for some time, under immense pressure to abandon its status as a tax haven. This has partly been coming from the USA but even moreso from the European powers.
Over time, this pressure will prove intolerable and I predict that the Swiss will have to relent in due course. Switzerland’s days as a tax/secrecy haven are already numbered.
I’m sure that’s a fine and noble job but I’m guessing few of the 52,000 Nord Americanos with UBS accounts are stage lighting designers as I doubt that pays well enough to warrant needing a off-shore bank account.
Yeah, I was too. It’s wildly overrated, it really is.
Like i said above due to Governments behavior – from food, tobacco, to money regulation, we are going for a big hike in black market and obviously mafia and other criminal entreprises.
Google up “Five Flags” and “W.G.Hill”.
Keeping your assets in your current country of residence is bad, if your intent is to protect them from government rape.
A United States branch of a foreign owned bank is still a bank in the US.
Agreed, luckylucky, but there is something to be said for dealing with “honest” criminals in preference to the government type.
“While I’m 100% behind the idea that the money we earn is ours not the state’s, if someone commits a crime (and in most countries tax evasion is a crime) they shouldn’t try and take the moral high ground.”
In that case, the USA owes us 276 years worth of back-taxes, starting with some tea you apparently threw in a harbour…
That’s a SQotD right there, Pa:-)
It’s not tax evasion that’s a crime. Or tax avoidance. It’s taxation that’s the crime.
Another SQotD!
it is their own funeral. hard to care about them or any other institution that caves to the fascist governments around the world.
In that case, the USA owes us 276 years worth of back-taxes, starting with some tea you apparently threw in a harbour…
Nice crack, but forget it, Pa. You got all of it back and considerably more out of Lend-Lease and the Marshall Plan.
I’m not surprised you tried it on, however. Bama’s a pretty easy mark.
It is long been the case that the protections offered by the Consititution of the United States (or rather accepted by the Constiution – as it does not claim to have invented the basic liberties of people) have been “interpreted” away.
So all it takes are people with collectivist intentions to gain power (only a matter of time considering the state of most American schools and universities) and they would find “the law” a weak defence against their “Mafia like” tactics – whether against American citizens or not.
Comrade Barack Obama and the other collectivists who surround him did not come from nowhere – they are the natural end result of trends in American history that go back a very long time.
As for UBS – bailed out by the Swiss govenment some time ago I believe.
A few years ago the “Economist” magazine hailed the “modernization” of Swiss banking – which, at least by the very low standards of fractional reservism, had been rather conservative.
When the Economist started to praise the modernization of Swiss banking – that was the time to get out of it.
Costa Rica has its problems – a Welfare State problem for a start (as does the United States of course).
Also Costa Rica is just over the border from Obama’s allies in Nicaragua – the Ortega regime.
Mac,
Obama is only an easy mark if you’re on his side. Cuba might have had a chance…
I expect you understand, but it’s sometimes hard to tell on the internet. The point wasn’t about the money, the point was about the morality of legitimacy. Strictly speaking, we decided to let you off the tea debt with the Conciliatory Resolution of 1775 and the Taxation of Colonies Act 1778.
(Whether it was repaid depends on what assumptions you choose to make. I think the tea destroyed was about £90,000 worth, which if we charged at 10% interest for 276 years would be about £23,912,000,000,000,000 today. Jolly good job we didn’t, eh?)
But the point of course was that American history itself teaches us that law is not identical to morality, and there is no reason why the simple illegality of evading taxes necessarily excludes the moral high ground. The Tea Party and related events were about the right of the British to extend their tax system overseas, to require the cooperation of institutions in foreign lands in collecting it, and to introduce laws allowing intrusive inspections (Writs of Assistance) to prevent smuggling. I’m sure you will remember the speech by lawyer James Otis on the topic.
I wouldn’t want anyone to think that because there are some parallels, that I’m saying the situations are exactly parallel. But at the time, it was arguably the law that you paid taxes, and the writs justified to stop smuggling, and the American revolutionaries who objected were legally in the wrong.
The whole basis of the philosophy of American Independence was that inalienable individual liberty trumped law. That even if the legitimate government thought the invasion of privacy was justified by the need to prevent tax evasion, there were some things that the law just could not override. There must be limits set to the tyranny of the majority. The Americans, of all people, ought to know that.
I’m sure you realised I was joking. In retrospect, I wasn’t sure if everyone would have got the joke, though.
Very good points, Pa. Indeed, revolutionaries are always legally in the wrong; the “rightness” of their cause isn’t accepted unless and until they are successful. In its Declaration of Independence the United States formally listed its grievances against the King, but unless the war were won the signers would have been hanged as traitors. (They absolutely knew that they were pledging their lives as well as their fortunes and their sacred honor.) Nearly a century later a group of states tried to secede from the union, and they likewise presented a formal list of their grievances, in a Declaration of Immediate Causes which was clearly patterned on the Declaration of Independence (and, indeed, which quoted from it the section describing the right of the people to alter or abolish any government which “becomes destructive of the ends for which it was established”). Their war did not end as well for them, and they paid the price. It is not only history, but also the laws, which is written by the victors.
Bare illegality says nothing about the immorality of the action. Libertarians, of all people, should understand that the powerful write laws to suit their ends, with putative “morality” being at most an afterthough, a thin veneer indended to provide a fig leaf of respectability to what is often nothing more than the naked exercise of power. Such laws deserve no respect whatsoever. I can’t imagine that it is possible for anyone to plausibly argue that the US tax code is fair, or just, or moral (or even sensible). As I said earlier in this thread, at a minimum we owe our moral support to those with the courage to flout it. “Cheating” on one’s taxes can be viewed as a moral imperative.
BTW, there is a strong possibility that a huge amount of money will flow into Singapore, which is already eyeing the chance of nabbing Switzerland’s lunch, not to mention its breakfast and supper.
If I had any money to hide I would hide it here. St. Kitts is one of the last places that doesn’t disclose to other countries.
Although banking is important to Switzerland – industry is actually more imporant.
Still, I agree, for the Swiss government to throw proper banks (not UBS) to the wolves via “international agreements” is very unwise indeed.
Law.
Remember the American Founders rejected the view of Blackstone that whatever Parliament said was “law” was law.
It was NOT that they regarded individual liberty as more important than law – they did not regard the taxes as “lawful” at all.
Universities may be dominated by legal positivists (basically “Thomes Hobbes is the greatest”), but the American Founders were not legal positivists.
Not just Jefferson and John Adams (whatever their other differences) – but even Hamiliton was not a positivist.
So the claim that “the tax is lawful because Parliament has pased it – and whatever Parliament passes is law by definition” would have been rejected by them all.
Remember the United States Constitution does NOT (to the Founders) give people rights – it recognises rights they already have under natural law (that may be crazy – but it is what they believed).
Of course these days it has all been perverted.
Indeed the United States government demands that citizens of other nations living in other nations, follow “laws” that are unconstitutional even for Americans in America.
“You who have never been to the United States, follow this regulation that all the Founders would have considered unconstitutional (and insane) even for Americans in the United States”.
How did things get to this point?
The “Progressive Movement”.
Were I the type to “consider” (wink, wink, nudge, nudge) putting my money overseas in a secret bank account it would be one both physically removed enough from the presence of the power of the US and/or it’s proxies to actually invade (think Panama) and with a government and people with the collective psychic constitution to resist and bristle at the impertinence of attempts by the US to interfere/meddle in it’s affairs. Both Singapore and the Isle of Jersey fit the bill quite nicely. And why those who put their holdings in places like the Cayman islands next door to an America with Marines and helicopters are foolish indeed.